G7 Agrees To Diversify Supply Chains, Reduce Inflation

Facts

• On Saturday, finance chiefs of the Group of Seven (G7) nations agreed to build more stable, diversified global supply chains to develop clean energy sources and "enhance economic resilience globally against various shocks."¹
• In a joint statement after a three-day meeting in Niigata, the US, Japan, Canada, Germany, France, Italy, and the UK set a year-end deadline for launching a new partnership to "safeguard energy security" and "maintain macroeconomic stability."²
• Termed Resilient and Inclusive Supply-chain Enhancement, or RISE, the partnership is designed to bring more low- and middle-income countries on board to beef up global supply chains. Details about the RISE's funding and its members haven't yet been disclosed.³
• While the topic of global supply chains was a dominant theme, the group stopped short of directly referencing China — a major trading partner for many G7 countries. It did, however, outline goals to ensure foreign investment doesn't "undermine the economic sovereignty of host countries."²
• In addition, the G7 pledged to address "data, supervisory, and regulatory gaps in the banking system" to ensure financial stability, asserting that the global economy remains "resilient" despite COVID, the war in Ukraine, high inflation, and the recent failure of several US banks.⁴
• The three-day meeting of financial chiefs took place days before the summit of G7 leaders in Hiroshima is due to start on May 19, which is expected to discuss wide-ranging issues, including the group's relations with China.²

Sources: ¹NPR Online News, ²Reuters, ³The Japan Times, and ⁴The Economic Times.

Narratives

• Pro-establishment narrative, as provided by Newsweek. The announcement once again shows the G7 and the West's support and commitment to a resilient world economy at a time when Russia's aggression against Ukraine has shaken the very foundations of the international order based on the rule of law and heightened the world's focus on gas and energy alternatives. The international community must band together to resist economic coercion from any country.
• Establishment-critical narrative, as provided by Global Times. Instead of bringing a solution to avoid a potential economic catastrophe that could disrupt global financial markets, the G7 continues to push its anti-China plans. While investing in strengthening global supply chains is alright, discussing ways to safeguard a "rules-based international order" against China's so-called "economic coercion" is hypocritical and aims only to protect US economic security.